4 Debt Payoff Mistakes We Made Last Year

11002543044_fa35ee112e_zAs I mentioned in our 2015 goals post, we didn’t put as much money toward paying off debt in 2014 as we would’ve liked to, and I’ve diagnosed 4 debt payoff mistakes that hindered us from performing as well as we could’ve last year.  Here’s a list of those 4 debt payoff mistakes, and what we’ll do (and what YOU can do) to make sure we don’t repeat them in 2015.

Debt Payoff Mistakes: The Biggie

The biggest of the debt payoff mistakes we made last year was that we lost our “laser focus” on whittling down our debt.  We forgot that our debt was an emergency, and we didn’t put the laser sharp focus on paying it off that we had in 2013.  This resulted in a dismal success number at the end of the year.  If this was you, here’s how you can avoid that mistake again: The remedy: Commit to and stay aware of how important it is to become debt free, and put charts, graphs and reminders in place to make sure you remember your goal.

The Enemy of “Best”

The enemy of “Best” is “Good Enough” and we definitely fell into being comfy with the changes we made in spending – too comfy.  We spent lots of time patting ourselves on the back for doing “better” than we had, and doing “better than most”.  When working toward any goal, looking down at the less successful instead of up at the most successful is a recipe for failure every time.  The remedy: Focus on role models who are ridiculously frugal and goal-committed, and stop comparing yourselves and your spending with others in your life who don’t have the same goals as you.

Continuing Education

One of the things that we didn’t do very well on this year was continuing to learn more techniques on getting free from our debt.  Figuring we knew “enough” we didn’t put much effort into learning more tips and tricks for getting to debt free faster.  The remedy: Commit to continuing your personal finance education always, learning all that you can about how to live more frugally and put more money toward debt.

Honest, Just Not Totally Honest

Yep, this was us.  We were honest with ourselves in some areas, but we ignored other areas of spending that could’ve been reduced in order to put more money toward debt and dump it as soon as possible.  The remedy: Be honest with yourself about every area of your spending.  Don’t just assume you’ve “only spent” so-and-so, especially in areas such as entertainment, groceries and clothing.  Write it down, track it, and own up to your expenditures.  The sooner you do this, the sooner you’ll work on cutting expenses and dumping your debt.

When working to reach any goal, it’s not the mistakes that are the problem: it’s the unwillingness to own up to and correct those mistakes.  Work to reach your goals faster this year by admitting and correcting the mistakes you’ve made that have caused you to wander off course.

What was your biggest mistake regarding your goals last  year?  What was your biggest success?

76 comments

  1. My biggest mistake was assuming that our emergency funds were as strong as they could be. We had a big hit at the end of the year and it definitely caused damage to our finances. That being said, I refuse to sit around and mope about it and like you, I have laser focus on the money this year, specifically growing the income side of the equation. We made a lot of changes on the saving side last year and now it’s time to work on income.

    • Laurie says:

      Good for you guys, Shannon: you took the blow you were dealt with, got on top of it, and are kicking tail. That’s the ticket,my friend!

  2. There are no mistakes in life…only learning experiences =) I’m sure you guys will learn from last year to have a better new year. I definitely get comfy at times and lose my laser focus. Plus, I really need to track my expenditures better.

  3. Honesty, or “being real” is always a challenge when budgeting. You want to keep your dining out under a certain amount, but in the end, you KNOW your lifestyle has you doing it more often. Sometimes, it’s about being real with how much you spend on things, and budgeting accordingly.

  4. Kara says:

    I go up and down with intensity. I guess that was my mistake of 2014. However, it’s hard to maintain intense focus 24/7….we need little breaks here and there!

  5. I think it’s easy to lose that laser focus when you are in the grind of daily life. Even as PF bloggers who “see” money related things almost daily, I still forget to check in with my net worth to make sure things are growing, or checking my accounts to make sure I’m on track, etc. One of my biggest mistakes of last year was putting too many of my eggs in one income basket. This year I’m 100% committed to creating things and going after what I want instead of waiting for things to come to me.

  6. Amy says:

    I definitely struggle with most of these. I think it’s really tough to find the right balance between laser-like focus and burning out.

    • Laurie says:

      Oh, I can identify, Joyce! You guys did a terrific job of paying cash for your wedding and honeymoon – not very many people can say that.

  7. Even Steven says:

    I’m actually a little surprised that you did not pay off more debt, I always think of people who are cutting their costs on groceries, eating out, etc to make big strides in debt repayment, I hope you turn the corner in 2015.

    • Laurie says:

      LOL, me too, Steven. We will definitely turn the corner this year. It’s tough looking back at a whole year of cutting costs in so many areas only to find out that the areas that you didn’t cut costs in negated your efforts. 🙁

  8. I need to track my misc. category better. I noticed it was the one thing I kind of forgot about and ended up being a little to high than I wanted. Otherwise, I did pretty good and tracking and reducing my other categories for the year cut $10k from my spending. I’m sure you’ll get back on the saddle again this year.

  9. Kassandra says:

    As you illustrated, paying off debt is no easy feat. It’s easy to get sidetracked and comfortable with a current level of progress! I experienced some of what you listed during the years I was paying debt. I know you got your game face on in 2015 Laurie. Last year we spent a lot of cash due to life events so this year I am looking forward to less spending and more saving/investing.

    • Laurie says:

      Thanks so much, Kassandra: I appreciate your consistent support. As for you guys, you will do great in 2015 – can’t wait to see your results!

  10. “When working toward any goal, looking down at the less successful instead of up at the most successful is a recipe for failure every time. ” Love that sentence, Laurie. I’m sorry to hear that you didn’t pay off as much debt as you intended last year, but it is great that you recognized your mistake and are taking actions to prevent it from happening again. I think it’s very easy to get complacent and lose laser focus. Now that you have your sights squarely set on your debt again, I have no doubt that you will be able to truly pat yourself on the back at the end of next year for a job well done!

  11. I don’t know about mistakes per se, but we definitely got off track on debt repayment mid-2014 when our basement flooded and our car got hail damage just a few weeks before our adoption. For us, 2014 went down as the most expensive year ever. BUT, we had extra income rolling in from a variety of sources in December and we threw every single penny at our debt repayment. Almost 1/3 of the money we put toward debt in 2014 was in December. We are hoping to have a less expensive 2015 and make more progress on debt this year 🙂

    • Laurie says:

      Wow, Dee! You guys did a terrific job of making up for lost time, even with the yucky stuff this summer! I think that deserves a huge pat on the back. 🙂

  12. Mrs. Maroon says:

    “It’s not what happens, but how you react”
    This is one of Mr. Maroon’s favorite things to say to me. I am often guilty of getting upset over my mistakes. He encourages me to turn that effort in to action and motivation to do a better job next time.
    Glad that you are able to recognize the mistakes from the previous year. Even better that you are using that knowledge to correct the mistakes for the coming year instead of creating a negative atmosphere of regrets. Here’s to much success!

    • Laurie says:

      Thanks so much, Mrs. Maroon. I spent many years regretting past behavior, but finally learned that it does more harm than good, so we’re on to remedying the problems! 🙂

  13. KIm says:

    I think it’s really easy to skew things the way we’d like to see them. I can justify just about anything if I think about it enough. The important thing is realizing it and doing something about it. Here’s to a better debt payoff year.

  14. Mackenzie says:

    We weren’t as focused with debt repayment as I would have liked to have been. But, we did move out of state so all of our focus was on that. Cheers to all of us paying off debt this year! 🙂

    • Laurie says:

      Moving – even a good move – is SO stressful, Mackenzie. I’m sure that once the dust has settled you’ll get right back on track. 🙂

  15. Catherine says:

    We made similar mistakes. Though we met outlr loose goal I know we were capable of more. We missed out on a few thousand dollars but like you we learned and fhats the toughest part I think.

  16. Gretchen says:

    We had the same problem in 2014. I could blame this parenthood thing, but that’s really not it. I’ve been focusing on reading things that inspire me – like the frugalwoods blog and this one. Also, I’m keeping visual reminders around to keep me motivated!

  17. jim says:

    Laurie,
    You guys have done a fantastic job – don’t forget to give yourselves credit for that. Man, if I could only do as well as you guys are doing on your grocery budget. Trying – sort of getting there (Ok, not even close – ha), but we have brought it down to under 55% of what we used to spend. I can’t give you any advice on cutting that food budget seeing as you’re kicking our a##es in that department – but in all other areas, we are actually making it ’cause we make a game out of it. Shift your mindset and instead of thinking this is a “job”, consider it a “dare”. Let someone once tell you that you can’t do it – ha! Game on and you’ve won ’cause you know no one is going to get away with telling you that you can’t. Best of luck. Keep going. You’re doing great. We started our journey exactly when you guys did – Jan, 2013 and we’re getting there – slowly, but surely.

    • Laurie says:

      Ha! Great minds think alike, my friend!!! That’s exactly the mindset we’ve switched to, Jim!! That, and seeking God re: every expenditure. So far, so awesome for 2015!

  18. I completely agree with you on the ‘being totally honest about expenses’ piece. I’m guilty of thinking “oh we only spent X” and I’m a chronic under-estimator (maybe I could say I’m “financially optimistic”? 🙂 ).

    I really benefit from reviewing every line item at the end of each month. Otherwise, I’ll assume we spent way less than we did. Knowing my weakness in this area has helped us ratchet down our spending.

    I know you’re going to have an awesome 2015, Laurie! Looking forward to reading along 🙂

    • Laurie says:

      LOL, “financially optimistic”: love it!!!! Yeah, we wrote down everything, but didn’t pay attention to the BIG totals at the end of each month until it was too late. OUCH. 🙁

  19. I think you did great! Not quite hitting your goals doesn’t mean you didn’t accomplish anything. We didn’t do everything perfectly in 2014 either, but we did the best we could and are more determined than ever to do better.

    • Laurie says:

      Thanks, Holly. We didn’t do the best we could, and that’s where I want to give myself a good kick in the arse. 🙂 But, onward, right?

  20. I think what you said about keeping the laser sharp focus is spot on Laurie. The hubby and I did that last year and we managed to clear our debt despite the fact that we earn a fairly low basic salary. We just kept the end goal in mind all the time, saving for debt payoff and not spending – to the point where we were wearing holey socks and pants (sorry you didn’t need to know that!) but I’m just being honest lol! I think clearing our debt last year was the biggest achievement we’ve ever experienced. We lost our focus though on retirement savings because clearing the debts became all consuming. Time to set new goals.

    I think you achieved lots Laurie last year and always thinking of ways to do things better is THE most effective way to achieve success!

    • Laurie says:

      Thank you so much, Hayley!! I love that you guys were wearing holey socks and pants!!! We are at that point: ready to do whatever it takes to get it done. Can’t wait!

  21. I think you did great overall Laurie! 🙂 That said, my biggest challenge over the past year was a lack of focus. There were some things we did really well on but others we failed at miserably and really came down to having too many goals and thus not focusing on some of them. That’s changing for this year.

  22. Man, I am sooooo guilty of the good enough mindset too. But like you, I don’t want to be good enough; I want to be amazing! 🙂 I am also not always very honest with myself, although I have gotten much better. This year I want to take action whereas I felt last year I was more stuck in my head, which isn’t where I need to be. Good luck on crushing your debt this year – I know you can do it, my friend!

  23. One of my mistakes was making vague goals about losing weight and “eating healthy” and not taking the time to really clarify what I wanted, why it was important to me and how I was going to get there. Now I’m making better SMART goals that are measurable and achievable (or trying to-it’s still a work in progress).

    • Laurie says:

      That’s awesome, KK! I had too vague of goals regarding health too, and although I lost weight, I didn’t lose as much as I wanted to. On to different strategies on measurable goals now!

  24. My greatest financial mistake in 2014 is that I failed to pay my credit card bills on time. This happened so many times. It was actually caused by poor planning of mine. Thus, this year I will formulate a plan to avoid this mistake again.

    • Laurie says:

      Ugh, that’s a tough one, isn’t it? Good for you for formulating a plan that will prevent it from happening this year. You’re doing great, Jayson!

  25. My biggest mistake was not taking care of my health. I ended up in the hospital before making a commitment to changing my lifestyle and doing what I needed to do to stay healthy. Not only did my hospital stay raise our healthcare costs significantly, but while I was there, my wife had to deal with replacing a gushing water heater, a major decision made under stress which cost us much more than it should have. These two things alone put a significant dent in our budget this year. We’ve learned from the past, and we’re planning for a better year for 2015.

  26. What I love most about this post is how in tune you are with yourself. I, too, will be getting an even sharper focus on my student loan debt in 2015 and minimizing my focus on everything else. It’s the “gazzelle” intensity that Dave Ramsey talks about.

  27. Wow. I just read about the importance of owning up to mistakes on the week-end – in Stephen Covey’s 7 Habits of Highly Effective People. While it’s easy to forgive mistakes that are admitted, he says: “But people will not easily forgive the mistakes of the heart, the ill intention, the bad motives, the prideful justifying cover-up of the first mistake.” That definitely applies to being honest with ourselves too. I’m with you on this one. Here’s to fierce honesty!

    • Laurie says:

      Love that, Prudence!!! I think it’s so true. Forgiven mistakes are those that are followed up by an honest desire/attempt to change.

  28. My biggest mistake was simply not having any goals. I was in the middle of a life transition and didn’t want to commit to anything because I didn’t know how the transition would turn out. It was good and bad. Good in that the transition went fine. Bad in that I didn’t accomplish much overall.

    • Laurie says:

      Ugh, that’s so difficult, isn’t it? I know with us that goals make all the difference, and obviously you guys have learned that well. 🙂

  29. Alexandra @ Real Simple Finances says:

    Thanks for sharing your tips! I’m certainly guilty of all of these. While not entirely a mistake, since it wasn’t quite my fault, we hit some financial trouble this year when I got stuck in a bad part-time job without any other form of income this summer. Yikes — definitely didn’t help us with out debt payoff plans!

    • Laurie says:

      Hi Alexandra – good to “see” you! 🙂 Yeah, we had similar setbacks, but are determined, as I know you are, to NOT let them get us down. Here’s to huge success in 2015! 🙂

  30. dojo says:

    Good enough .. that’s my problem too, in many cases. I’ve sometimes set myself to some pretty good goals and then decided that my efforts were good enough.

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